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Capital Market Development and Emergence of Institutional Investors in the Asia-Pacific Region

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  • Hans Genberg

    (South East Asian Central Banks (SEACEN) Research and Training Centre)

Abstract

Bank credit is traditionally the largest source of finance in the Asia-Pacific region, but the role of capital markets has increased over time. There is substantial heterogeneity across countries, however. For capital markets to develop further, macroeconomic stability, strong property rights and enforcement of securities laws have been identified as particularly important considerations together with building of a state of the arts financial infrastructure including trading platforms, clearing and settlement systems, and transparent information sharing arrangements. Institutional investors tend to have long investment horizons and as such contribute to the stability of the local market. It may therefore be appropriate to explore ways to increase their presence in the domestic bond and equity markets. One way to do so is to promote savings through national pension funds and insurance companies. Promoting the participation of institutional investors in the domestic market may also be pursued via enhanced access for foreign institutional investors, being mindful of the risks to domestic financial stability associated with greater openness to international capital flows. Policy makers may also explore ways to take advantage of the emerging field of impact investment for the support of funding for projects with environmental, social, and infrastructure content.

Suggested Citation

  • Hans Genberg, 2015. "Capital Market Development and Emergence of Institutional Investors in the Asia-Pacific Region," Working Papers wp11, South East Asian Central Banks (SEACEN) Research and Training Centre.
    • Handle: RePEc:sea:wpaper:wp11
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    File URL: https://www.seacen.org/publications/RePEc/702003-100378-PDF.pdf
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Hyeladi Stanley Dibal & Habila Abel Haruna & Chinyere C. Onyejiaku & Ogbole Friday Ogbole & Josaphat Uchechukwu J. Onwumere, 2024. "Pension Fund Investments and Capital Market Development in Nigeria: The Moderating Role of Inflation," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(2), pages 248-269, May.
    2. Michael Regan, 2017. "Capital Markets, Infrastructure Investment and Growth in the Asia Pacific Region," IJFS, MDPI, vol. 5(1), pages 1-28, February.
    3. Hans Genberg, 2017. "Financial Integration in Asia," Working Papers wp22, South East Asian Central Banks (SEACEN) Research and Training Centre.

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    More about this item

    Keywords

    Capital Market Development; Institutional Investors; Impact Investment; Asia-Pacific Region;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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